Toward Global Private Regulation

The FSC is perhaps the best current model of a civil regulation organization. It sets global multi-stakeholder standards for forest management, based on a democratic decision-making process. Compliance with these civil standards is then independently monitored, which is similar to the way compliance with legal standards is measured. One of the possible problems with this model is that the business pays the civil regulation bills. This could compromise the independence of the regulator. To combat this, accreditation is used. The actual monitoring and certification is performed by companies or organizations (certification bodies) who are paid for the regulatory service. These certification bodies are then accredited by the FSC to ensure that they uphold the standards and criteria of the FSC. Whereas the certification bodies might be vulnerable to compromised independence, the accreditation process ensures the credibility of the system.

The standard-setting process is paid for by donations from governments, companies, trust funds and so forth. Companies pay for the actual certifications, and eventually pass on the costs to the end consumer. In this way, companies or individuals pay for the regulation of a particular product when they buy that product. Independent certification of business against multi-stakeholder defined sustainability standards represents a privatization of the regulatory function of government, while protecting the democratic participation of citizens. We believe that this system could become the new regulatory framework for business in a global economy. We call it global private regulation.